Neil Woodford, Britain’s star fund manager who is considered by some as one of the best of his generation, is to join a small private equity group in a marked change of direction in his career.
Mr Woodford, awarded a CBE in the Queen’s honours list last year and singled out in John Kay’s review of equity markets as a model manager, will join UK-based Oakley Capital in May.
The move by the head of UK equities at Invesco Perpetual, who announced his intention to leave the group in October after 25 years, immediately sparked controversy and questions over conflict of interest.
Shares in Oakley’s Aim listed private equity arm, which Invesco is the biggest holder of with a 31 per cent stake, jumped 6 per cent on the news, increasing the value of the Henley-based group’s investments in Oakley by £4m.
Oakley and Invesco were unavailable for comment.
Strategists said the jump in shares was clearly a boost for Invesco and Mr Woodford, although adding that the fund manager would boost shares of any new group he joined.
Oakley also invests in funds of hedge funds, venture capital and corporate finance as well as offering financial advisory services.
Peter Dubens founded Oakley in 2007. He said: “I am delighted Neil is joining and we fully support his desire to create his own transformational asset management business soon after joining Oakley.”
Oakley will provide the infrastructure to allow Mr Woodford to manage retail and institutional clients’ money immediately after his employment with Invesco terminates in April.
Mr Woodford will run a much smaller fund at Oakley, which is likely to have millions rather than billions of pounds at its disposal. This is a big contrast with his role at Invesco, where he runs £32.5bn of assets, more than any other British fund manager.
Mr Woodford is known to have wanted to downsize because he was struggling to maintain his successful investment performance. He still has one of the best performance records, having returned 23 times his investors’ money over 25 years.
But his best years were a decade ago when his funds were much smaller.
Mr Woodford made his reputation as an activist investor who held stocks for a dozen years or more. He was instrumental in blocking the merger of BAE Systems, the UK defence company, and EADS, Europe’s biggest aerospace group, saying there was a danger that the merged company would become a “puppet” of the French and German governments.
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